Century Logistics Holdings Bhd(April 7, RM1.17)Initiate outperform with a target price (TP) of RM1.43: Century Logistics Holdings Bhd, founded in 1970, is an integrated logistics player providing services from international freight forwarding, transportation management and distribution, contract logistics, oil logistics, halal logistics services and data management services to procurement logistics. The local parcel industry has been riding on the momentum of the booming e-commerce industry in Malaysia. We arrive at our TP by pegging financial year 2018 earnings per share with a target price-earnings ratio (PER) of 19 times. The company could potentially enjoy premium valuations like other parcel delivery players such as Pos Malaysia Bhd and GD Express Carrier Bhd (both trading at forward PER of 38 times to 76 times) if it manages to successfully kick-start the parcel delivery business. We are recommending Century Logistics for its recovery in logistics activities, venture into the e-commerce space, change in corporate structure under the new leadership and a solid balance sheet with a net cash of RM22.2 million.

Source: The Edge Markets April 10, 2017 01:52 UTC